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Thursday, October 15, 2009

Hungary: Privatisation on parole

This article of mine appears in the New Statesman.

Twenty years ago, Hungary's decision to open its border with Austria triggered the dramatic events that led to the fall of communism in eastern Europe. But today the country is fighting the neoliberal economic model imposed after 1989.

In Pécs, a historic city in the south, the local authority has reacted to public anger over soaring water bills by sending security guards to seize the local waterworks from the French company Suez Environment and to prevent its management from entering the building.

A 48.05 per cent stake in the city's water company was sold to the French multinational, which supplies water to 76 million people worldwide, in 1995. The company also receives an annual "management fee" of 120 million forint (£419,000).
The mayor of Pécs, Zsolt Páva, has accused Suez of profiteering and a lack of transparency, and the town cancelled the contract with effect from the end of September. Suez is countering with legal proceedings. "If 20 commandos arrive at 3am and occupy somewhere, that is not a European solution, and is undoubtedly illegal," a company manager said.

But Suez, whose turnover last year was €12.4bn (£11.5bn), should not expect much sympathy from local people, struggling to make ends meet in an economy where real wages are forecast to fall by up to 3.5 per cent this year. In a poll, 94 per cent said they supported the local authority.

It's not the first time the French company's record has been challenged. The pressure group Food and Water Watch charges Suez with a "range of abusive practices that place profit before the human right to water", including refusing to extend services to poorer areas, cutting off water if people are unable to pay, and "raising rates to unaffordable levels".

Opposition to privatisation is high, so, with a spring election looming, even neoliberal politicians are having to change their tune: in June, Prime Minister Gordon Bajnai said he would prevent privatisation of the water supply.

Multinationals may not like it, but 20 years on from capital's conquest of eastern Europe, public ownership, not privatisation, is the vote-winner.


Gregor said...
This comment has been removed by the author.
Yaroslav said...

Neil, your post reminds me of something in Serbia during Slobo's rule. Suez and other French corporations around the time Dayton was being negotiations and talk of removing sanctions on Serbia came to Serbia trying to get Slobo to sell them public utilities.

They came to Serbia. Promising billions in investments. Slobo opposed, France was more then happy to not oppose German-UK-US desire for bombing (German for it's interest of dominating Eastern Europe, UK to promote "liberal interventionism", and US for Clinton to distract the people from the Lewinsky affair).

Anyways. The G17 Plus neoliberal economic tried to promote such privatizations aftger Slobo fell , luckily all regimes no matter how much they go against the people have opposed it.

Martin said...

Cochabamba in Europe - interesting. There is, of course, no such thing as a market in water; if there were, one would be able to see the factories where it's made.

Yaroslav said...

Neil, also of interest is the "Emerging Water In€dustry in Greece." ( <-- the recently elected "socialist" government has never indicated that they oppose these developments.

Neil Clark said...

Hi Yaroslav,
Many thanks for the link.
I'm afraid I don't hold out much hope that Greece's new 'socialist' government will be much better than the previous govt.
Slobo certainly paid a high personal price for keeping rapacious foreign companies out of Yugoslavia. As I've written many times before, if he'd opened up the Yugoslav economy to foreign capital, launched a programme of mass privatisation and obediently filed his application to join NATO and the EU, he would have been lauded as a 'visionary leader' and a 'great democrat' in western capitals.

Gregor:the sentence you refer to re Obama's 'softer touch' is truly shocking.

Martin: Quite. They'll be lobbying for the privatisation of the air next.

Czarny Kot said...


I am still strangely addicted to CiF, even though it is going to the dogs, but I gave up on the Guardian newspaper a long time ago.

To be fair though, the Guardian has always called itself a Liberal newspaper rather than social-democratic or socialist paper so maybe the 'leftist' tag was never too accurate.